Monday, June 01, 2009

GM goes down leading the rest ..

The legendary Pied Piper led all the rats of Hamelin to the river and drowned them .. Is Obama likewise leading the drowning drive of American companies starting with GM ?? Hope not !

GM filing for bankruptcy is a big news, but equally sad... Nobody ever thought that this symbol of American capitalism would collapse like a pack of cards .. With Chrysler down some time back, it is a matter of time before the other auto giant also follows suit.. !!

Even though the major plan through this bankruptcy filing under Chapter 11 is to restructure GM while protecting it from the debtors, we have to wait and see how this white elephant can ever be revived. Even if US govt pumps in another $30 billion, after the initial $14 billion already gone into it, without US economy revival, will demand for new cars be created ?

When Toyota , the world's best and largest car maker is reeling under losses, how can a refurbished and polished GM ever survive the cruel world of competition, quality and price ..? Or is it an attempt to protect American ego, like "putting stones in the ocean", is it $ 30 billion wasted and illspent ?

Though Obama would want GM to be dissolved once for ever and a new smaller, efficient, agile entity created in its place, the average American would never want it. Like Perestroika crushed and dissolved the former USSR, will capitalism with its own contradictions, crush and destroy the US. Wishful thinking is that such a thing would not happen.. But the evidence of reduced influence of US in world affairs is very much evident with new players like India and China entering centrestage ..

The interesting fact is that while the parent companies are under terrible pressure to perform and unable to create customer interest, the Indian entities of Toyota, GM and Ford are doing well. This is not only in India , in China too..

During these times of recession, it gives an impression that the IMF and World Bank were intentionally siding in all its predictions and forecasts with the Western countries who created them. It is a question of survival of these Bretton Woods sisters.. These international financial organisations owe it more to the Western countries, who fund them, than to the principles of Economics. Quite contrary to their expectations and contorted predictions, Indian economy is doing exceptionally well.

India has recently upgraded its GDP growth during the last quarter to 6.7 %, which is very healthy considering the global gloom and manufacturing downturn. We are once again a trillion dollar economy, with the GDP crossing a trillion dollars..

It appears India will be given the onerous task of leading the world ( or hand hold it ), showing that not only can democracy help a country grow, it can help it gain respect in the comity of nations too..

The resilience of the Indian economy to weather any downturn is turning out to be exceptional.


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